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Friday, August 19, 2011

The Importance of Understanding Your Publishing Contract

Only a few things can top the satisfaction of getting a publishing contract- when that editor says, "Yes, loved it! We'd like to acquire it". The moment is unforgettable and very validating. But that is not the end of the writer’s journey. Nope, that's when the fun begins... Well, for me anyway. For most, the review and negotiation process in finalizing a publishing contract can be dreadful. This is in part because most authors aren't lawyers with years of experience in negotiating contracts, and most, unfortunately, don't know as much about the publishing business as they do about their writing. The problem, therefore, emerges mostly due to the uncertainty about the quality of the deal.

I often say "knowledge is power". If you don't know what you should be getting in a publishing contract, you won't really be able place yourself in the position to assert your rights and entitlements. And so, my first recommendation is to arm yourself with ammunition. In other words, learn how things work. There are, and I hate to state the obvious, books on the subject, and a ton of sites that can help you learn what you need to know. However, the information is often scattered, outdated, and sometimes inaccurate. So don't put all of your eggs into the proverbial basket. Talking to other writers can be a great source too. However, I find that as much as there is a camaraderie among writers, when it comes to how much money they earned or how many books sold, everyone is tight lipped. So this leaves you with me, or other literary professionals who really know the industry.

Terms to pay special attention to:

Duration of the Agreement- Publishing contracts last from 3-7 years. If at all possible, avoid anything longer than seven years, or anything that lasts for the duration of the life of the copyright. Which, by the way, is the life of the author plus 70 years, or in the case of a joint work, the term lasts for 70 years after the last surviving author's death or 75 years, whichever is longer. If a company is the author, the duration is 95 years from the year of first publication or 120 years from the year of creation, whichever expires first.

Copyright- The copyright is your legal protection to prohibit anyone other than you from reprinting and selling or disseminating your work. In the United States this right is obtained by filing an application with the US Patent and trademark Office. Not all countries have such applications/protections, but you should always apply in the USA. Your goal should be that the Publisher file the application under your name. The purpose of the contract is to give the publisher the right to publish pursuant to the copyright. We call it a license to use the copyright for the duration of the agreement and not for the duration of the copyright. You can of course, file it yourself, but it can save you the time, money and stress of not knowing what to do if they do the filing for you.

Primary and Secondary Rights- The whole point of this contract is to give the publisher the right to publish your work. So the right to print the book, and to post an e-version of the work is a given (today most publishers will demand both unless they are e-pubs who are not interested in print). However, when possible, retain some of the secondary rights- the rights to produce a film, merchandise, syndication, gaming, book club, etc. Sometimes you can even keep translation and foreign rights.

Advance- Although I can't predict how much a publisher will pay for your book, I can usually make an educated guess based on the genre, length, the author's platform, the house, the list, the budget, the economy, and prior deals of the parties involved. In other words, there are lots of factors involved, so I won't generalize here. You should know that an advance is the money that the publisher pays you in ‘advance’. Once the publisher earns back the money that they paid to you, then you start receiving royalties.

Royalty- Royalties are the percentage of the profits that the publisher will pay to you. These vary from Publishing House to Publishing House and on the medium of publication, from hardcover, to mass market, to e-books and audio books. Mass market royalties are usually the lowest, and can be as low as 4%, and e-books vary the greatest from about 6% to 65%. A good average royalty for e-books is about 35%. Self publication contracts are different.

Out of Print- The publisher will decide when the book goes out of print. Customarily, when a book is out of print for longer than a 12 month period, the author may ask to terminate the agreement and have the rights reverted.

Other terms to be aware of are anything giving the publisher the right to terminate the agreement early. Be aware of what will trigger the Termination. Pay attention to make sure that you do the edits and they approve them. Never give up the rights to change your work without approval. And if the publisher includes a clause about the right to publish an excerpt of your work for non paid marketing purposes, be sure that the word count is no more than 10% of your completed work.

Of course there’s more to the contract than these clauses, but I hope that this entry gives you a good foundation with regard to what you need to know. It is important that you are aware that there is help out there. If you are skilled and lucky enough to procure a publishing contract without an agent, you should probably have a literary consultant or an attorney take a look at the agreement and advice you on the terms or negotiate on your behalf. Just be sure that your relationship with the said professional is clearly delineated in a retainer agreement so that no agency relationship is formed unless that is your intent. An agent will be entitled to 10-15% of all your profits whereas a consultant or lawyer usually gets paid on a per hour basis or a fixed fee.

Hope you find this helpful. Please feel free to post comments and questions or e-mail me at consulting@corvisierolaw.com if you need help with your publishing contract.